Performance and scalability are essential non-functional features of contemporary cloud solutions. Performance modeling and simulation techniques provide the tools required for cloud capacity planning and design. In this publication we describe a modular approach to simulate the hardware and software components of clouds. This approach supports the rapid construction of new cloud models by combining available simple or compound simulation modules, adding new cloud modules when required and adapting the implementation of existing ones if necessary. Key design points are a careful separation between hardware (infrastructure) modules and modules representing software workflows as well as the introduction of a system of a hierarchical request execution phases separating the simulation of high-level cloud workflows from the simulation of workflows at hardware component level. © 2011 IEEE.